Lawmaker Wants To Protect Coloradans From Arbritration Clauses

DENVER (CBS4) – As Congress grilled the former CEO of Equifax, Richard Smith, in Washington Tuesday over their recent massive security breach, in Denver, the Colorado Consumer Protection Coalition urged lawmakers not to let Wall Street off the hook.

Kevin Rhoades is among the more than 145 million people whose personal information was hacked at Equifax.

“My personal information was breached,” he said.

(photo via Smith Collection/Gado/Getty Images)

The company agreed to freeze his credit, he says, if he agreed to abritration rigged in their favor.

“I as an individual don’t believe it’s fair for me to go up against them on their terms and under their conditions,” Rhoades said.

Wells Fargo, which recently owned up to questionable banking practices, is also used a binding arbitration clause in the legitimate accounts victims had to avoid lawsuits stemming from the fake accounts they created.

State Rep. Mike Weissman says the clauses are in the fine print of virtually every contract, whether you sign up with a cellphone carrier or cable company even day cares and nursing homes.

“And then down the road something goes wrong and you may have your back up against the wall and need to go to court — you find you can’t because that right was signed away in a bargaining situation where you really had no say,” said Weissman, a Democrat from Arapahoe County.

Weissman plans to carry legislation that would make arbitrations fairer to Coloradans so they happen in Colorado by a neutral arbitrator.

“I think the reality is arbitration clauses are bearing down on probably most residents of Colorado right now in some contract that they’re party to, whether they know it or not.”

Weissman says he will introduce a bill in the next legislative session that requires more transparency when it comes to arbitrations and a level playing field, or an arbitration could be voided.

Meanwhile, at the federal level, the Consumer Financial Protection Bureau issued a rule that prevents arbitration clauses from denying people the right to class action lawsuits. Republicans are trying to repeal it.